This is the twenty first episode of our series #BKOT: Build a KickAss Offshore team and covers the subject what type of firms should avoid offshoring and what type can make a success. Listen to the podcast to know more.
#BKOT 21 BUILD A KICKASS OFFSHORE TEAM
WHAT TYPE OF FIRMS SHOULD AVOID OFFSHORING & WHAT TYPE OF FIRM CAN MAKE A SUCCESS
Chris Rivera, Director Client Relations, Entigrity
Sia Kal, President, FY USA
Shawn Parikh, CEO, Entigrity Offshore Staffing
Ted Rosedale, Vice President, Entigrity Offshore Staffing
Chris: Happy friday everybody, very excited to have you all here. Thank you for taking time out of your schedule and joining us today. This is #BKOT how to build a kickass offshore team, we are on episode number 21. We have a lot of great content, if it's your first time thanks for joining us, and if you're a returning visitor thanks again as always it's friday, it's fun we end a week like this and we have some interesting topics to discuss.
The topic for today is what type of firms should avoid offshoring and what type of firms can make a success. So it's very interesting today and joining me I have from clockwise Shawn Parikh, Ted Rosedale and Sia Kal again, very excited to have you guys here so this type of topic, you have to really take a deep look into your firm. Essentially every firm can offshore, but there's a lot of things that need to be in place. It can't just simply be a turnkey solution, you hire somebody and it just takes off on its own that's never the case. Whatsoever and working with clients on a daily basis that's never the case so there's several things that have to be in place, so guys what would you think are some of the top three objectives of a firm looking offshore? What should they be?
Sia: Can I give a little disclaimer before we answer that question because as our listeners are listening to this sort of the strategies and the ideas that we're going to be discussing.
- If you happen to listen to our talk today and you realize that you are already offshoring and you realize that you belong to the category of the firms that should avoid offshoring please don't panic, it doesn't mean that is what I have done. It just means that there's some things that need to be addressed and where and you just need to address those things and then you'll be fine.
- The second thing I just want to say in terms of a disclaimer is that in no shape or form are we going to say that you have to have a perfect firm before you do any kind of offshoring, so that's not the message either so I just want to get those two out there and just clear it up.
Shawn: So we all Me, Chris, Ted all the time talk to clients, and from our perspective when we started this, we were small, so we want every kind of firm to be working with us. All clients we don't want to say no to. We want everyone, but all the time we realized and then we internally discussed that we should come up with a definition of who is not our client.
And then and this one thing which I read somewhere which is absolutely kind of appropriate here and when we came with this definition of who is not our client. This kind of thing perfectly fits here.
So we realized after 2-3 years that not all accounting firms are our clients and we wanted to please every one of them. So that's how the realization came in. Some of the firms are absolutely not placed or need to kind of take some steps before they get ready and not sets like they have to be completely on cloud. The steps are getting the team ready, getting mindset ready and several other things that we can talk about later but one thing one realization after three years of being in business was that not every firm is our client.
Ted: Correct that's right companies can hit obstacles when they're doing something like offshore staffing. There has to be the correct management and strategy in place for that long-term vision, so it's a lot about the people at these firms that have to understand where their firm's going and the steps that have to be implemented to make this work. So you're totally correct Shawn.
Shawn: It took a while to get there and we learned to say no after two three years in business. Otherwise you always want to say yes to everything. I mean I was talking to Christopher with one firm, I think three or four days back and he was constantly asking me. Are you sure that this person will be able to do financial statements and be able to review everything and put the correct footnotes and correct disclaimer and be able to prepare reports? I said if I would have been able to predict the future or success of anybody well I'm not talking to you. I'll be in the Bahamas. Why would I be talking? I mean we don't know the future. At the end of the day we told him frankly that it is basically both sides that have to work to make it work as simple as that. So we have learned to say no wherever it is required. I told him that things that are not implemented lead to failure.
Chris: If you fail the plan then you plan to fail. People think it's literally a turnkey solution sometimes that's not the case.
Sia: Yeah there are two things that actually pop into my mind when it comes to when you should avoid offshoring.
- If you're having problems in your communication with your team,
- If you're having issues developing trust in your team.
Then probably offshoring is not the next thing you should be doing. If you are offshoring right now and you do have those two problems those are the first two things you need to address in order to really capitalize on the opportunity you have with your offshoring staff.
So we're as CPAs very often referred to as the trusted advisors. Question is: Are you also a trusted leader? and that question needs to be asked from your team and in a way that it could be anonymous. And be ready to accept the results or whatever it is.
Chris: Yeah I find that a lot of times working with clients they haven't even brought it up to their team and they ask me should I tell them and I said yes this just has to be a collaborative effort. I don't know why you're trying to sneak this in and just trying to always want to have them part of this decision, because they're probably going to be working with one of them eventually and if your team has no idea about this, they're going to be rub them the wrong way whether or not, especially if it's there to help them. If you haven't collaborated or communicated this, they're going to automatically think, Oh that goes my job, so that's just the mindset that they'll be in.
And the whole time, the firm owner may have the objective of lessening their workload and and helping them and enabling them to do more but he's trying to do things behind the scenes and it's just that's not a good setup.
Shawn: Yeah you're absolutely right you gotta make it a team effort. A very funny example here Ted's father owns an accounting firm and he happens to be one of the partners in the business. Ted works with us and unfortunately his own accounting firm, we are not able to implement offshore staffing there. So that's a firsthand example, we tried it but the way they operate it is so kind of, he's very hands-on with his business and he runs like that and possibly he tried but I think Mike has many things going around him. So accounting from what you know six seven things he's doing.
Ted: I think it's a good example of the partners in the firm they really have to establish those effective processes, and manage the transition from their current setup to a team that could be completely remote. So if you're not ready for that transition and to manage that process from A to Z it could fail. So you have to be a firm that's willing to adapt and tackle the communication barriers, understanding the cultural differences and be able to revolve. It's all about modernizing your firm, so it can be a very positive thing so I think all firms can do this. You have to be ready to take those steps and do it properly.
Sia: I echo everything everyone just mentioned in terms of what makes a workflow system. Before the Covid thing hit, there was something different about the workflow process dealing with offshoring versus your on-site team. There was a distinct difference in how you would do things with your offshore team versus with your on-site team.
However since this pandemic came about we all went remote working. So all of a sudden the ones who were already doing offshoring they knew how to take that process they were doing and just implement it with their on-site team, because they already had it in place. And the ones that never did offshoring they had to figure out how this remote working situation works. So the good news is that right now everyone has had a little bit of a taste of what the remote working environment is and how you can have a system of workflow processes, that ensures security efficiency on and on.
What the things you expect from one workflow process. Chris, a quick question for you man you've had plenty of experiences dealing with what goes right and what goes wrong with offshoring? What is the red flag in your mind that and the green flag for when you take a you know the first hour you speak with someone from a firm you've never met before what's that one thing that it gives you the red and the green flag whether this is worthwhile or not.
Chris: I had a client yesterday that was referred to us from a current client which is always great and the client I was speaking with literally said my workflow is all over the place. This is the first thing and he's like I know he's tried offshoring before and he tried piecemealing together. The workflow at the offshore he spent a ton of money and it never worked out and so in speaking with us and how everything works, he told me and I was like literally if a client has asked me what's the one thing that doesn't work and it is the workflow.
A lot of the clients will say I'm hiring one of your associates they're gonna tell me what to do no that's not the case and so it was refreshing to hear that he's trying to get everything into place. He actually asked me to seek a consultant for project management. He was very aware of that and so in order for this to take this will always take off it's just a matter of when and when is all relevant on the all relative to the client. And speaking with them and then if they were to ask me you know where this does not succeed and it's always about the workflow. It's simply that because it's remote and they're not in the office and there's time zones so there's all these little nuances that have to be ironed out and then it'll take off it's only a matter of time.
Sia: Yeah Shawn I hope that all the partners that are listening to this, they take some inspiration and some courage from making such a bold statement but it's not just a bold statement it is really the thing that a successful leader needs to consider which is you got to learn - how to say no to some client, some customers. You have to have the courage to do that, because that's a way of it that's just kind of like your firm.
If you consider your firm like a human body if you just say hey i'll just eat anything, how could that possibly be healthy. If the clients are the food and you just say yes to everything I mean you're eventually going to have some kind of a health condition. So saying no is basically passing by mcdonald's and saying no okay this type of situation. So what do you do Shawn though when you have situations where for one reason or another you have firms that have already done offshoring and they've had these red flags that for instance Chris mentioned and then they were ignored for one reason or another and they're already doing offshoring. What kind of a recommendation would you give to them?
Shawn: Well as we go by the title the recommendation I mean I'm also a private investor whenever I think of something I always try to take analogy from investment or the sports world. I play cricket. It's always like to think what a sportsman would think? What would an investor think? So let's say which person should avoid investing in the stock market or which it is good for which person. I mean let's think about it from that point. A person who wants quick money, wants five times money in ten days or you know someone who has short temperament or a person who does not have any idea about capital or finance stock market is not for them.
The good thing is you should go to a fund manager, go to a portfolio manager, pay some fees there and put the money in and expect a decent return. Somebody who is savvy, who knows diversification, who knows the capital market who analyzes there who has financial knowledge and most of all who is in for a longer term that goes through with even offshore staffing. If you're knocking for a longer term, if you're not in for five years, you should be knocking for five minutes. That's how I always say so yeah that's I mean when when you talk about recommendations, the analogy is similar that if you're super traditional paper driven completely if you think that your median age of your team is beyond 50 or 55 not just yours, I mean owners and partner are pretty agile because you know it ultimately it's well. I mean it's a positive impact on your profitability, but when you're at your team's median age is not to offend senior citizens but sometimes it's difficult. And then difficult to adapt so these are some of the situations where it's very difficult to implement and the recommendation would be evaluation of your own firm not just going by what you know benefits of short staffing is going to bring, because you're not going for black friday shopping because it's cheap. I'm going to buy everything right away. It's not like that and this is what we have observed. I mean real-time example is again I'll go back to Mike, Ted's father when I met him he (mike) has another partner in the firm and he was so excited that even first meeting that you know we're going to ramp this up and we're going to hire six people in one year, that's how excitement was and in one month you realize he's not picking up my phone.
Ted: Shawn you bring up a good point. I just want to add this one thing. If the top reason to offshore is to benefit from a lower cost that is definitely not the only reason to do this, that might be actually a reason you could fail. There's a lot involved in this and you definitely have to be prepared so like you said for the stock market you have to think long term you can't go for that quick hit, so definitely this strategy of getting six people is a great strategy but you have to know how to implement that.
Shawn: You remember that meeting I had with your dad and I'm forgetting the name of the partner. Ed I remember it. Yeah and mike told me I still remember that if you can convince my partner, you can convince anybody in America.
Sia: Apparently Ed is also a jets fan and Ed thinks that he's got the most amazing kids in the world based on what's on the website. So anyone who wants to challenge and I can also reach out to Ed in regards.
Shawn: Are you with google?
Sia: I'm on the front side because I wanted to familiarize myself a little bit more with it. I am doing a little bit of the magic of google. I went to google and he fixed it.
Shawn: One more thing after a very good point which Ted brought up. We always say that this offshoring is not for the one who thinks it is junk or who thinks it's a slam dunk. The one who thinks that's good yeah so it's neither of them. So if you think that's an easy thing because it's happening at so low cost no it doesn't work like that.
Sia: To drive the point home not that we need another analogy but it is the best way that I think about offshoring is that, if your marriage is suffering, when has ever been a good idea to say hey I know how to fix it. Let's have a kid, that's gonna fix everything, it's gonna fix our communication, it's gonna fix the way we do. I mean that's going to just be wonderful. When did that ever help anything. Believe me my parents they will tell you it doesn't work folks. We had and it didn't fix anything. So the point is look, it doesn't mean that you cannot work on the things that are weak, it just means that it's not the right time.
Speaking of children they ask you for things and sometimes you say yes, sometimes you say no, and sometimes you say not yet. And in most of these cases it's just all we're saying is that if there's a red flag, it's just not yet those are the components you need to work on now by the way you don't stop working on those things just because you've got them figured out and now you're offshoring as a matter of fact you obsess over them.
Best things in life they take time as Shawn mentioned five years, definitely! You show me a good and then going back to this a good marriage and I'll show you years of them both working on it together. Same thing with firms. You show me a good firm. I'll show you some partners that were persistent that failure wasn't an option and it wasn't about how many times actually they fell it was about how many times they get back up and they start. They kept working on it and so offshored five years absolutely absolutely.
However let me just add this also time doesn't heal all wounds it doesn't. I wish it did, but it really doesn't so what we're not suggesting is wait around and then with time things are going to just get fixed. It's you've got to do something about it you got to work on your communication, your workflow process, your handling of your team management, of your systems and processes and then you continue to do it for a much longer period of time and it will be worthwhile.
Chris: Yeah I think it's also important when like I've been asked am I able to call them, can I email them, can I give them an email address and I just say simply treat it like it's your own associate. You got to go in with that type of mindset. You got to go with the right type of attitude. If you just treat it like it's your own employee, it seems when saying less is more in this instance. It just falls into place because I've been asking like just silly questions sometimes. I'm like it's your employees fine, give them an email don't worry just go ahead and call them, and so you have to have the right attitude and mindset to make them part of your team and the long-term solution as well and long-term doesn't have to always mean you know full-time to gradually scale and grow as your firm grows as well and it's all about complementing and so it's just a nice gradual approach with a good attitude and this will work.
Shawn: So there are some clients who are want-based clients. They know that they can do it. We have experience of working with so many accounting firms, so I'm not saying that we have faced all kinds of problems but we have faced a finite number of problems with different kinds. Sometimes the difficulty on my side, Chris's side on the Ted side. I think they'll identify with it. We advise them that be prepared, this is going to happen. Sometimes they think that it's completely extreme, some people are not able to figure out and before even exploring further or trying further just give up, just get scared and some people they would not listen to anything. They'll just start off and fall. They will fall apart very quickly.
So that's one of the challenges that we face of course we are improving upon our communication and first thing what we did this year was we have to do this right at the beginning, otherwise we see at the end of the day what happens is we are whether we want to accept it or not it's a relationship. It's not their fault, it's not our fault, but still we are somewhere somewhat we failed and we don't want that we are at this juncture in a business that we are happy not adding five firms but it is more painful that we lose one firm.
Things were different six seven years before. So right now when you ask us that you should have the guts of saying no, we never had a choice in the first two-three years honestly speaking. We never had that choice, today because we are stable, we are here, we are all cautious now, much more in taking clients not that we are not welcoming, we are excited to work with everyone out there and we want every one of them working with us. But yes as I said, we don't want to fail. As I said the secret of not failing is we understand we cannot please everyone.
Sia: Yeah and you probably are pickier now than you were on day one in terms of who you hire too. So you're cautious not just on the client side, you're more cautious on the HR side as well. And I wonder if Ted or Chris you guys can share something in regards to firms that don't spend as much time and due diligence upfront with who they hire, may experience more difficulties with offshoring than the ones that do. Any instances you guys can think of that our audience would want to let.
Ted: I'll add one thing here for sure and this has a lot to do with the firm's management style. We have spoken to clients or prospects, who basically said hey just assign me any old accountant, just give us somebody we're ready to start tomorrow. I don't wanna interview anybody, just give me an accountant. I'm ready to do this.
We then tell them this is gonna be very successful only if you take the time to interview the candidates, speak to them, learn you could potentially work with, and ask them questions. As Shawn said this is a relationship, we can't just assign an accountant to you the same way you can't just go on to linkedin, pick a random person and hire them in your office. It doesn't work though. It's never going to be successful, so there's that mindset you have to take the time and set this up properly from the beginning to meet our accountants and select who you want to work with. That's the beauty of working with us.
Shawn: Absolutely Ted and one of the things they want all the success that they get with their onshore team members, but they don't want to take any pain which they typically take in hiring and managing onshore team members. So that's a little contradicting or a little paradoxical perspective that they end up asking, do you think he's gonna work or do you think, this is gonna happen. They want to pre-meditate us and ask questions. I said we are taking a judgment the way you are taking a judgment and we have had a fair share of failures.
Sia: You don't have a crystal ball to know, to tell people what's going to happen. I mean the thing is, at some time ago in the industry of offshoring and it's just to a certain degree even today that exists in other providers. I've seen that unfortunately the way they market to accounting firms is in such a way, that it gives the responsibility a little bit on the industry itself, rather than on the provider sometimes. As it is on the accountants and so without mentioning any names here but I personally know that there are some providers out there that give such an image of it's just gonna fix everything.
The only thing it won't do is make you a turkey sandwich other than that it does everything for I mean what are you waiting for. And unfair unfortunately a realistic expectation is not set at the price of wanting to get someone excited about offshoring. When in reality if you're a prudent mature leader, you understand as Shawn said just like anything else you've got to invest time, effort and energy like Chris and Ted mentioned to invest in those people and they're hiring and making sure the right people and then never stop continuing to pour out things to them. And that means one of the other flags whether it's red or green it depends on whether you have it or not if training is a priority in your organization. If training is not a priority in your organization you're dead in the water whether you go offshoring or not you have a problem you have to resolve. If training is in fact a priority and you want to continue to train your team regardless of offshore or onshore then you're good then, that's good because that means you're investing, you're caring about. I feel like I'm rambling on. I'm gonna stop making good points.
Chris: Yeah just some final thoughts as Ted said it's spot on. In the beginning I would give an option I was like you can interview them, give them a call zoom, see the resume pic. Now they're like how do we do the interview. I'm like zoom you just set the expectation, no more flexibility because if you just go into it and we assign you somebody that doesn't work out and all the blame and faults on us. It's just that's not a relationship, whatsoever all right and so just having that attitude going into this of treating it. Like you're an employee it'll definitely work. And I remember how many times I told Shawn no to those clients and he said yes. Oh god I remember those those days, I was like no no no Shawn's like yes yes.
Sia: That's funny, that's great. Chris those conversations happen in me but not with anyone else that's the crazy part about it, like I'm telling myself I'm saying, I shouldn't be well maybe I should no no no I shouldn't. Oh well let's think about that for just a moment let's not be too hasty.
Let's analyze this but the human factor of all of this is that you know the heart once was what the heart wants. So whatever is going on in your head, whatever your perception is in your heart when it puts that stamp for it your brain goes to work bends over backward to justify it.
And so I think that overall we had a good conversation today in regards to what are the things that the firms should pay attention to in terms of offshoring whether it's the right time, it's really more of a timing issue than reprimanding you for not being ready. It just depends on where you are in the season of your firm and hopefully with everything, we just discussed there was enough good out there that you guys can go to and think about and by the way. I don't think Shawn minds it. I don't think Chris or Ted mine had to if you guys have any follow-up questions or something that triggers something in your mind and you really want to go a little bit more in depth.
Shawn: We are going to discuss this in our forthcoming conference so you would like to invite firms that's the follow-up right.
Sia: Yes so there's you're talking about accountable 2020.
Shawn: Yes of course!
Sia: The only one I've been obsessing over for the past. I feel like I've been obsessing about it since the day I was born frankly, but yes Accountable 2020 is being held on November 12th and 13th and it's going to be a workshop and it won't be boring. It won't be boring I promise. You can have some fun and learn some things and some to actually work on your business instead of working in your business.
For the entigrity clientele for anyone who is a member of entigrity. So we're bringing you accountable 2020 in association with entigrity and with myCPE, it is a joint effort. We are all a piece of the bigger puzzle and what we've done is that we put it all together, so that we can give you the best of the best that we have and hopefully it will impact your business and upgrade your performance.
But for those of you who are clients of entigrity you can use a discount code of let's see let me see if I can think about this E as an Edward, N as in Nancy, T as in Tom, ENT that stands for ENT2020. If you go to the registration page click on the blue link that gives you the option for a promo code and use ENT2020 and you will get a 65% discount only reserved for those of you going to accountablefirms.com and uh if you happen to be a my cpe account holder and you use them as well you can feel free to use myCPE2020. that is that code is meant for you as well.
Shawn: Thank you everyone, I think we had a good conversation today. Thank you, Chris, Thank you Sia, Thank you Ted.
Chris: All right closing out #BKOT episode 21. Thanks everybody for joining. Have an amazing weekend, stay safe and sound and we will see you soon with more fun topics to talk about. Thanks everybody, take care.
Entigrity™ is a trusted offshore staffing partner to over 500+ accountants, CPAs and tax firms across the US and Canada. Our flexible and transparent hiring model gives helps firms of all sizes to hire staff for accounting, bookkeeping, tax preparation or any other task for 75% less cost. As a firm 'run by accountants, for the accountants', Entigrity captures the hiring needs of accounting firms most precisely, providing staff that works directly under your control and management, still you are left with least to worry about compliance, payroll taxes, overheads or any other benefits.